IT’S TODAY: You probably aren’t going to want to break out the
bubbly but today is “Tax Freedom Day” in Pennsylvania.
This is the first day of the year that you can stop working for
the government and start working for yourself.
What that means, of course, is you have labored 117 days this
year just to pay your state, federal and local taxes. In
Pennsylvania, this combined cost of government will consume almost
32 percent of the income of Pennsylvania residents.
Nathan A. Benefield, director of Policy Research with the
Commonwealth Foundation in Harrisburg, cites the data from an
annual report from the Washington, D.C.-based Tax Foundation.
Where does Pennsylvania stack up against the rest of the
country?
For the nation as a whole, Tax Freedom Day is April 30. Dates
for individual states range between April 12 (Oklahoma) through May
20 (Connecticut). Twenty states have Tax Freedom Days after
Pennsylvania’s, while 28 states have lower overall tax burdens.
Pennsylvanians spend more money in federal, state, and local
taxes than on housing and health care expenditures combined.
According to Benefield, the current system of collecting taxes
is intentionally designed to hide the true tax burden.
Automatic withdrawal from workers’ paychecks for income, Social
Security, and Medicare taxes (and matching payments for payroll
taxes from employers) by the federal and state government spread
out the burden over the year, and alleviate the pain of having to
write out a check to the IRS or the state department of revenue, he
notes.
The state collects an incrementally small tax on purchases
through the sales tax so as to be unobtrusive but these add up over
time. Taxes on businesses, passed on to consumers through higher
prices, lower wages, or fewer jobs, are also hidden from view.
Even property taxes – least popular precisely because they are
most transparent – can be hidden as a portion of monthly mortgage
and escrow payments, he added.
Here are some more facts that you probably won’t want to
celebrate:
* Pennsylvania has the 24th highest state and local tax burden
in 2007, and the 19th highest federal tax burden.
* Pennsylvania’s Tax Freedom Day is one day later than a year
ago, and 10 days later than it was just three years ago.
* State and local taxes consume 10.8 percent of Pennsylvanians’
income, about $4,400 per person.